Hemet balances budget without tapping Measure U funds

In split vote, city council rejects two budget proposals based on Measure U ‘surplus’

Chart by Taj Shorter/The Valley Chronicle
Budget B option plan.

■ By Taj Shorter / Reporter

Hemet City Council finally adopted a budget plan for the 2018-2019 fiscal year – and it doesn’t involve using Measure U money.
During the Tuesday night meeting, June 26, council members voted to pass a budget option that would resolve a $3.4 million deficit in the City of Hemet’s general fund.
Leading up to the final decision was plenty of debate and review by city council members along with the public. The pressure to decide how to balance the city’s budget resulted in a special council meeting June 20 prior to the regularly scheduled June 26 meeting that was reserved for voting on a budget plan.

Citizenry pushback
“We can’t put in fairy tales about what great housing developments we want – in a budget!”
So said Hemet citizen Pat Gregory addressing city council at the special meeting held to review options for rectifying the city’s out of balance budget proposals. “This is a budget meeting, you have to make reductions.”
Gregory’s comment was in response to gloomy concerns Hemet Mayor Michael Perciful expressed about few if any efforts being made to generate new revenue, either from attracting new businesses or additional housing developments.
“What are we doing to bring new businesses here to increase revenue as opposed to we’re making cuts everywhere?” asked Perciful. “We haven’t had any discussion about getting jobs here and haven’t had any discussion about getting new housing here, and we haven’t had any discussion about getting new businesses here.”

Budget option proposals
The city council at first was presented with two options for balancing the budget during the special meeting by City Manager Allen Parker and Finance Director Lorena Rocha. In both budget proposals, referred to as Budget A and Budget B, there were compromises. The council had deferred adopting either budget option until the following meeting June 26 at which where the finance director and city manager introduced yet a third option coined Budget C.
Budget A proposed using Measure U money in part to balance the budget by $1.7 million, while the rest would have been balanced by a hiring freeze and fund balances from internal services. Budget B conforms to the Measure U Oversight Committee’s request to leave the surplus intact. Budget B will instead use fund balances from three internal revenue services (workman’s compensation, the liability fund, and the retiree medical fund) to cover $1.5 million of the deficit. The remaining will be funded by deferring maintenance projects, cutting training funds for all departments in half, and slowing equipment replacements. Finally, Budget C suggested using $2 million of Measure U funds to close the gap, including a portion of fund balances and a hiring freeze as well.
All three budget options were reviewed at the Tuesday meeting, and after hours of debate, Russ Brown, who had been straddling the fence between Budgets A and B, clinched the vote for passing Budget B. Perciful and Mayor Pro Tem Karlee Meyer were on the opposing side of the vote and felt it was unfair to other city departments to cut their budgets when a Measure U surplus was available.

Measure U controversy
Measure U was a controversial topic as council members had struggled to decide the best option for resolving the budget deficit.
In the June 20 meeting, Perciful reiterated that the current state of the city is the very thing that is withholding Hemet from prospering. Clearly discouraged, Perciful referenced the city’s graffiti, potholes, and homeless that plague the city as a hindrance in moving forward. Since almost 80 percent of the city budget is reserved for public safety, Perciful pointed out that it is difficult to fund a clean-up of the city if the available funds to do so are less than 20 percent of the budget.
“It’s become a burden on the general fund – Measure U has.” Perciful went on to explain, saying, “Because, in a sense, the general fund aside from Measure U is going to continue to fund and fund, above and beyond public safety. Everybody else has to cut so public safety can move forward.” The mayor said that he didn’t think it was fair to other city employees who fall under the 20 percent of the budget.

The final decision making
Members of the council were so unsure of which option to go for, Perciful asked the city manager which option he recommended. Parker, despite his initial recommendation of using Measure U funds, suggested option B. Parker said he had met with members of the Measure U Oversight Committee and understood better why they opposed tapping into those funds to balance the budget.
Russ Brown had initially expressed amazement on the pushback over using Measure U money to help balance the budget, unsure of how it goes against the resolution of Measure U to fund only public safety. The so-called surplus would have paid back public safety raises implemented before Measure U money started flowing.
During this week’s meeting, Brown did practically a 180, siding with councilmembers Bonnie Wright and Linda Krupa by agreeing with them that it was “too early” to start using Measure U funds and that it would be better to give the newfound revenue more time to prove itself resourceful.

Chart by Taj Shorter/The Valley Chronicle
Budget A option plan.
Chart by Taj Shorter/The Valley Chronicle
Budget C option plan.

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